A corporation paid $103,000 to retire bonds with a face value of $100,000 and an unamortized discount balance of $2,500. The entry to record the early retirement of the bonds will include the recognition of a loss of

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The corporation paid $103,000 to retire bonds that had a face value of $100,000 and an unamortized discount balance of $2,500. Therefore, the corporation paid $100,000 + $2,500 = $102,500 for the retirement of the bonds. This amount is $500 more than the face value of the bonds.

To record the early retirement of the bonds, the corporation will debit the Bonds Payable account for the face value of the bonds ($100,000), debit the Discount on Bonds Payable account for the unamortized discount ($2,500), and credit the Cash account for the amount paid to retire the bonds ($103,000). This will result in a loss of $500 ($103,000 - $102,500), which will be recognized in the income statement.

Therefore, the answer is choice C, $5,500.

A Corporation Paid $103,000 to Retire Bonds with a Face